How to Attract Talent While Bolting the Back Door

1. How to Attract Talent While Bolting the Back Door Best Practice Institute Webinar November 19, 2007

2. AGENDA • Introduction • Bolting the Back Door - Retention • Employment Branding • Development • Suggested Action Steps

3. Hiring / Retention Key Employee Retention is Mission Critical • In a service industry, success is often driven by two key differentiators: • Technology • Employees • Good, skilled employees are hard to find …and its getting harder • Employee loyalty is low – and dropping: Only 34% consider themselves loyal – The 2005 Walker Loyalty Report • Companies that better manage turnover provide better shareholder returns (43% vs. 34%) – 2005Watson Wyatt Human Capital Index Report

4. Hiring / Retention Retention Savings Can Be Measured Lost Productivity of Existing Workforce Additional Overtime Lost Institutional Knowledge Internal Recruiting Costs External Recruiting Costs Lost Management Time Lost Customers Training Costs $$$

5. Hiring / Retention How Expensive is Turnover? Employers often consider hiring the best employees the prime objective; however, Keeping your best employees is just as important. * Studies show such costs between 100% and 300%

6. Hiring / Retention Planned Turnover Turnover Happens Achieving zero percent turnover is not realistic, especially in today’s job market (7x per career) Some Turnover is Desirable • Departures provide opportunities for advancement • Lower performing employees will cost you more than the cost of their turnover • New employees bring new ideas, approaches, abilities, and attitudes

7. Surveys show most employees leave due to: • Bad Relationship with Supervisor • Lack of Recognition/Rewards • Non-Competitive Salaries and Benefits • Lack of Advancement Opportunities • Better Commute Options • Lack of Training/Education • Lack of Responsibility/Challenging Work • Do Not Feel Valued Part of the Organization • Most sophisticated service organizations devote efforts to ensure competitive salaries/benefits [Note: direct and indirect costs = 70%+ total expenses] • Job opportunities and culture also play a key role in retention What do your exit interviews reflect? Hiring / Retention Employees Don’t Leave for More Money – T/F?

8. Hiring / Retention Basics Only Set Foundation for Retention • Compensation • Base Compensation vs. Incentive Pay (“Golden Handcuffs”) • Merit Adjustments – Reward High Performers • Competitive Salary Data: • Surveys – Watson Wyatt, Mercer (Generally P&C) • Recruiter Feedback – Core Jobs such as Staff accountants, Managers • Benefits • “Core” Benefits Must be Competitive • Consider Other “Benefits” – Flex schedules, Wellness Programs, Customer Service Awards, etc. Ask Your Employees – Survey

9. Hiring / Retention Key Areas to Set Foundation for Retention • Empowerment • Top employees are not just looking for a job, they are looking at what the organization has to offer for growth in skills, status, responsibility, and pay • Training/Development plays a key role • Promotional Opportunities – At what level are you hiring your future leaders? • Culture – Family Feeling • Does the culture of your organization embody what employees are looking for? • Recognition • Inclusiveness • Fun • Flexible • Physical Environment • Ease of Commute • Positive Management Style • Lifestyle Friendly

10. Recruiting and Hiring - Branding Employment Branding

11. Employment Branding Recruiting – Select the Right Person in the First Place • The recruiting process is one of the most important in ensuring high employee retention • Ensuring a “fit” will mitigate employment issues, potential litigation and turnover: • Qualification Fit (job description, skill sets, soft skills) • Culture/Work Style Fit (entrepreneurial vs. “corporate”) • Eight Basic Steps in Recruiting/Hiring Process: • Hiring Planning • Active Search • Pre-Screening • Interviewing • Reference Checks • Job Offer • Post-Offer Testing • Hiring Documentation Manage the process to ensure it is smooth and professional

12. Recruiting and Hiring - Branding What Are People Saying About Your Company? “The best recruiting tool in the world is to become the most talked about place to work.” Dr. John Sullivan • Employment Branding: • Longer-term solution to provide a steady flow of qualified applicants • Creates an image that makes people want to work for the company • Reduces the average time necessary to fill open positions • It builds and reinforces the public's image of the company’s culture, work practices, management style, and growth opportunities

13. Branding Example of Poor Employment Branding: Would you want this job? Case Clerk/Calendaring Date: 2006-07-18, 10:48AM PDTMid sized law firm is seeking a Case Clerk with calendaring experience and to do other "go-fer" tasks. Must be willing to work evenings and weekends when needed. Background check and drug test required. TO APPLY: Please visit our website no -- Principals only. Recruiters, please don't contact this job poster.no -- Please, no phone calls about this job!no -- Please do not contact job poster about other services, products or commercial interests.no -- Reposting this message elsewhere is NOT OK.

14. Branding Samples of Employment Branding: The Container Store We're a company known for impeccable customer service and expert salespeople. We're a company that insists on having fun. Simply put, we approach retail differently. In fact, for these reasons and more, we've been at the top of FORTUNE magazine's list of "100 Best Companies To Work For In America" seven years in a row. One of The Container Store's core business philosophies is that three good people equal one great person in terms of business productivity. So, why not hire only great people? With that said, when it comes to selecting who will join the team, we go to great lengths to look for that one great person to fill a position.

15. Branding Samples of Employment Branding: J. M. Smuckers Of particular importance is our emphasis on people. We will be fair with our employees and maintain an environment that encourages personal responsibility within the Company and the community. In return, we will seek employees who are committed to preserving and enhancing these values. We firmly believe that the highest-quality people produce the highest-quality products and services; that the highest business ethics require the highest personal ethics; and that responsible people produce exceptional results.

16. Employee Development Major Employee Lifecycle Activities Orientation Get employees assimilated into your organization as quickly and comfortably as possible Training and Development Formalized training programs and growth opportunities has statistically shown to increase retention Performance Management Recognize employees for their contributions and make them feel like they are contributing to a meaningful cause Incentives/Rewards Provide total reward packages that will retain your high performers while increasing shareholder returns

17. Employee Lifecycle - Orientation Orientation – Keeping New Employees on Board Effective orientation programs go far beyond having new hires spend a couple of hours with an HR representative and/or filling out payroll and benefits paperwork. Departmental management plays a key role. New employees are much more likely to develop a stronger sense of commitment if a well-planned, comprehensive process is implemented to accomplish the following: • Promote open communication • Provide information, support, and resources to employees • Assimilate employees into company culture • Help employees get to know and learn from each other • Recognize all individuals as being vital contributors to the organization's success.

18. Employee Lifecycle – Training/Development Training • Training programs have been shown to foster loyalty by surveys • Buying expertise versus developing it • Training should be utilized judiciously – When economy growing rapidly, organization may be training employees for competitors • Training appears to bolster shareholder returns based on Watson Wyatt HCI Study:

19. Employee Lifecycle – Training/Development Development • Establish formal performance reviews with three basic elements: • Goals and Objectives • Core Competencies • Development Plans • Increase employee involvement in areas outside core job such as special committees or task forces • Education reimbursement – job related • Flexibility Pull New Hires into the Fold Quickly Keep Your Employees Involved Communicate Frequently

20. Conclusion Suggested Action Steps 1. Conduct a Retention Study 2. Re-evaluate Your Hiring Processes / Orientation Program 3. Make Employee Retention a Part of Your Manager Goals and Objectives 4. Consider Establishing a Mentor Program 5. Build Your Employment Brand 6. Be Flexible – Strive for Work – Life Balance

21. Conclusion • Evaluation Form Paul S. Finkle, CMC WEA Consulting 1000 Fourth Street, Suite 150 San Rafael, CA 94901 pfinkle@weaconsulting (800) 333-4734 www.weaconsulting.com www.sharedhr.com